MCDONALD'S MUSIC PROMOTION BOOSTS SALES 3%

Contest Required Internet or Cell Phone Response

The Deal: McDonald’s turns to music to help promote its Big Mac sandwich and brokers a deal with the House of Blues Entertainment.

The Result: The promotion helps boost sales by 3% for the Golden Arches and also helps establish House of Blues as a music brand that has national relevance for advertisers.

McDonald’s Corp. may not yet have signed any deals with music artists to incorporate its food into lyrics, but early returns on a three-week “Are You Mac Enough?” promotion with House of Blues Entertainment to promote the Big Mac far exceeded the expectations of everyone involved.

The promotional event celebrated everything Big Mac.

A sweepstakes that ran from April 12 through May 2 offered consumers a chance to win concert tickets and other prizes by using promotion codes found on Big Mac boxes. Customers older than 16 received one of eight promotion codes on Big Mac packages to enter at www.playatMcD.com or by sending text messages to a dedicated cellular phone number.

The text messaging was set up to work with most U.S. wireless carriers to maximize the potential for cell phone use.

June 8 drawing

Winners will be named around June 8 by a random drawing for prizes, including a grand prize of hotel and airfare and tickets for up to 10 House of Blues concerts of choice and 10 first prizes of two tickets per month for a year to regional House of Blues venues. As many as 200,000 text-message entries could be accepted and each person could enter up to eight times with different codes.

About 40% of the entries were made using text messages, nearly twice the figure McDonald’s expected. The remaining entries came online. McDonald’s wouldn’t disclose the sales impact, but early results show the event helped drive sales up 3%, according to knowledgeable executives.

“We’re pleased with where we netted out,” said Douglas Freeland, director of brand and entertainment strategy for McDonald’s U.S. Marketing. “This had a more underground feel. Instead of pounding them over the head, we let them discover it.”

The first-time partners launched the sweepstakes with two sold-out concerts, one in Chicago featuring Brooklyn rapper Fabolous, and another in Los Angeles, featuring Latin group Ozomatli.

Music is No. 1 passion

Developed by Havi Group’s the Marketing Store Worldwide, the print, radio and in-store effort built off the insight that music is the No. 1 passion for young adults, regardless of their culture. It was the first sweepstakes using text messaging for the burger giant in the U.S., said Chris Hess, account director for young adult team at the Marketing Store Worldwide.

Despite their relative sophistication in sports marketing, “McDonald’s is getting a late jump into entertainment and music,” he said. “We love the fact that McDonald’s is open to new measurements and new vehicles in which to reach young adults. McDonald’s has taken a risk and stepped out and has found a mechanism of talking to young adults that really works.”

In many ways, the event was a textbook example of how McDonald’s is trying to evolve its marketing to young adults.

Blatant commercialism

To combat the blatant commercialism associated with a marketer the size of McDonald’s, the company aligned with an entertainment company that isn’t viewed as commercial and kept a “very low-level presence,” Mr. Hess said. Inside the House of Blues, posters and flyers were on tables at the bar and also in restrooms. Outside, lights were used to spell out Big Mac. The team used text-to-screen messages inside the venues on closed-circuit TVs, while having the Big Mac, House of Blues and the music talent constantly interacting on-screen throughout the show.

The promotional event celebrated everything Big Mac.

Text-to-screen is still a relatively new technology, despite being used on MTV programs for years, where viewers interact with each other by sending messages that appear on-screen during programming in a simulated live chat. Mr. Hess said the text-to-screen participation was 6% to 10% higher for this program than any other.

No flash-in-the-pan

“The young adult consumer is the smartest consumer out there, and they are very cautious about being advertised to,” he said. “Gone are the days of slapping your logo on a music tour and getting credibility out of that.” Marketers also can no longer take an ad hoc approach to entertainment marketing with one-off programs when it comes to reaching young adults. “You have to have constant buzz throughout the year and are activating constantly throughout their world, no flash-in-the-pan stepping in and stepping out,” he added. “We’re looking at that more closely in 2006.”

McDonald’s also tied the event with its sponsorship of the Hot Import Nights tuner car show that includes music, video games and, of course, the latest tricked out rides. The car show said its attendance grew 30% in 2004 and expected double-digit growth for 2005. McDonald’s also laid low on that effort. “The biggest mistake we could have made was to take the whole thing over,” said Mr. Freeland, who added the effort was tied to McDonald’s late-night initiative. The chain had a booth on site, passed out “be our guest” cards and posters of car owner Jay Laub and sponsored a “people’s choice” award that attendees could text their votes for their favorite car. Omnicom Group’s GMR Marketing, Milwaukee, handled the effort.

“When we first sat down, we really contemplated that the brand fit had to be important,” said Paul Sewell, senior vice president of sponsorship at House of Blues Entertainment. “Being a branded music experience, it became important that it was a cooperative brand and one that consumers would look at and say ‘this makes sense.’”

Narrowcasting the Big Mac

He was especially pleased with the ability to “narrowcast” to a specific brand, in this case Big Mac, and a specific music genre, hip-hop. “I don’t think we’ve gone anywhere around the country in the last month where somebody hasn’t mentioned it,” he added. Moreover, he also called the technology component a “pleasant surprise.”

In another benefit to House of Blues, the effort opened the door for future promotions with McDonald’s and other marketers.

“We deal with a lot of sponsors or brands who don’t look at House of Blues as a national music property. It really enabled us to talk about House of Blues as a music brand that has national relevance.”

The event is just one of many planned as McDonald's surrounds its products with entertainment to gain relevance among young adults. “We want to create more of an emotional linkage between the brand, our products and young adults.” After years of appealing to children, the fast-food giant now is trying to “demonstrate to young adults that we get them,” he added. It’s a move that has been more successful with young women than young men. More than two years into the “I’m lovin’ it” campaign, McDonald’s still has a long way to go to win over young men, the most avid fast-food eaters.

Three years to change its image

“It would be arrogant to start anointing ourselves as cool,” cautioned Mr. Freeland, noting it will take three years to change its image with young adults. “If young adults perceive us that way, that’s great.” He did get a call from the lead singer of one Los Angeles band called Paperboy Jack who said the event was cool and offered to wrap their trailer with Big Mac after the event. “That’s exactly who we’re trying to connect with,” he said.